S-Reits Record Net Institutional Inflows in March

Global Markets React to US Tariffs, S-Reits Outperform

Market Turmoil

Global markets experienced a sell-off after US President Donald Trump imposed a 10% baseline tariff on imported goods from all countries starting April 5. The US markets reacted sharply, with the S&P 500, Dow, and Nasdaq indices dropping 4.8%, 4%, and 6%, respectively, in the April 3 session.

Straits Times Index (STI) Declines

Following the tariff announcement, the Straits Times Index (STI) dipped close to 2% in the morning session, with about S$1.6 billion worth of shares changing hands. The STI closed the week with a 3.7% decline, after five consecutive sessions of losses.

S-Reits Outperform Global Reit Market

In contrast, Singapore real estate investment trusts (S-Reits), as tracked by the iEdge S-Reit Index, rose 1.4% on April 3 following Trump’s tariff announcement, and ended the week in positive territory, up 0.2%. S-Reits outperformed the global Reit market, with the FTSE Epra Nareit Global Reits Index declining more than 3% in the April 3 session.

Institutional Investors Rotate into S-Reits

Institutional investors were seen to have rotated into S-Reits, with about S$26 million of net inflows during the April 3 session, possible indicating a preference for relative stability and income potential amid a volatile market.

S-Reit Performance

S-Reits ended the first quarter of this year with total returns of 2.8%, driven by a 5% price gain in March, marking its best monthly return in eight months. Within the iEdge S-Reit Index, 23 trusts were gainers, two remained unchanged, and five were decliners during March. The top S-Reit performers for the month were Frasers Hospitality Trust, Frasers Logistics and Commercial Trust, ParkwayLife Reit, Keppel Reit, and CapitaLand Integrated Commercial Trust.

Underperformers

Conversely, the underperformers in March were Digital Core Reit, Keppel Pacific Oak US Reit, Sasseur Reit, Manulife US Reit, and Daiwa House Logistics Trust.

Fund Flows

In terms of fund flows, institutional investors net bought more than S$71 million into the sector during March, after five consecutive months of net institutional outflows since last September. The five S-Reits which had the largest net institutional inflows in March were CapitaLand Integrated Commercial Trust, Mapletree Logistics Trust, Paragon Reit, Keppel Reit, and ParkwayLife Reit.

DBS Research

DBS Research noted that geopolitics and economic tariffs remain a key overhang, which could further escalate global trade tensions and add to inflationary pressures. However, the house sees a risk-off shift towards defensive names, which could benefit Reits in the process.

Conclusion

In conclusion, the S-Reit sector has demonstrated its resilience in the face of market volatility, with institutional investors rotating into the sector. The top-performing S-Reits for the month were Frasers Hospitality Trust, Frasers Logistics and Commercial Trust, ParkwayLife Reit, Keppel Reit, and CapitaLand Integrated Commercial Trust.

Frequently Asked Questions

Q: What was the impact of the US tariffs on global markets?
A: Global markets experienced a sell-off, with the S&P 500, Dow, and Nasdaq indices dropping 4.8%, 4%, and 6%, respectively.

Q: How did S-Reits perform during the first quarter of this year?
A: S-Reits ended the first quarter of this year with total returns of 2.8%, driven by a 5% price gain in March.

Q: Which S-Reits were the top performers for the month?
A: The top S-Reit performers for the month were Frasers Hospitality Trust, Frasers Logistics and Commercial Trust, ParkwayLife Reit, Keppel Reit, and CapitaLand Integrated Commercial Trust.

Q: What was the impact of institutional investors on the S-Reit sector?
A: Institutional investors net bought more than S$71 million into the sector during March, after five consecutive months of net institutional outflows since last September.